2014 (7) TMI 42 - HC - Income Tax

Court affirms CIT(A) decision on assessment completion date, emphasizes limitation period & official acts presumption

Commissioner of Income-tax Versus Subrata Roy

The High Court upheld the CIT(A)'s decision, emphasizing the importance of the completion date of the assessment order within the limitation period and ... Effective date of passing assessment order - Bar of limitation – Demand Notice served after 47 of expiry of limitation alognwith the copy of order - Whether the order dated 31st December, 2008 could be said to have been passed on 31st December, 2008 when the demand notice together with a copy of the order was served after 47 days – Held that:- The appellate authority cannot be expected to dispose of an appeal without looking into the assessment records - Had the appellate authority relied upon any independent enquiry or the result of any such enquiry, then it would have been incumbent upon the appellate authority to inform the assessee about the result of such enquiry so as to afford an opportunity to the assessee to make his submission with regard thereto - An appellate court cannot be prevented from perusing the lower court records - It is a strange submission to make that the lower court records could not have been perused without giving an opportunity to the assessee - Tribunal was not taking evidence of the matter as a Court at the first instance would do. A period of 47 days’ time is not time long enough which can even make anyone suspicious as regards the correctness of the date of the order - the presumption arising out of clause (e) of Section 114 proves the fact that the order was passed on 31st December, 2008 - The same presumption once again would apply to the order dated 13th November, 2009 passed by the CIT (A) - There is no reason to even entertain any doubt as regards the existence of the file including the order dated 31st December, 2008 - There is equally no reason to doubt that the assessment order was passed on 31st December, 2008 – thus, the order of the Tribunal is set aside – Decided in favour of revenue. Issues:1. Assessment order completion date and limitation period.2. Presumption of regular performance of official acts.3. Production of assessment records and principles of natural justice.Analysis:Issue 1: Assessment Order Completion Date and Limitation PeriodThe appeal challenged a judgment where the Tribunal accepted the assessee's contention that the assessment order was not passed within the limitation period. The CIT(A) confirmed that the assessment was completed on 31.12.2008, within the limitation period. The High Court referred to legal precedents emphasizing that the completion of assessment, not the service of the order, is crucial. The Tribunal found no evidence that the assessment was framed on 31.12.2008, leading to the revenue's appeal.Issue 2: Presumption of Regular Performance of Official ActsThe revenue argued that the presumption of regular performance of official acts should apply, indicating that the assessment order was passed on 31.12.2008. The assessee countered, asserting that the department failed to produce assessment records despite opportunities. The High Court noted that the presumption of regular performance of official acts supported the order's validity on 31.12.2008, dismissing the revenue's appeal.Issue 3: Production of Assessment Records and Principles of Natural JusticeThe assessee contended a violation of natural justice as the assessment records were not offered for inspection. The revenue argued that the second submission on this matter was raised belatedly. The High Court held that the CIT(A) was not obliged to disclose assessment records to the assessee before considering them. The Court found no merit in the argument that an adverse inference should be drawn due to the absence of records, reinstating the CIT(A)'s order.In conclusion, the High Court set aside the Tribunal's order and upheld the CIT(A)'s decision, emphasizing the importance of the completion date of the assessment order within the limitation period and the presumption of regular performance of official acts in legal proceedings.